Stable, dividend-paying stocks may not be as exciting as their more volatile non-dividend cousins, but there’s a reason world-class investors like Warren Buffett love them.
Over the long term, dividends are undoubtedly the lifeblood behind overall stock market returns. Take a look at the gains over the past decade for both the S&P 500 and the Dow Jones Industrial Index, with dividends (“Total Return”) and without them:
Source: ^SPXTR data by YCharts.
Of course, even without dividends, the indexes still turned in a respectable performance. However, the inclusion of dividends added a whopping 51% and 40% to the Dow and S&P 500’s returns over the past 10 years, respectively.
So which dividend stocks should you buy for the long haul? Here are three possibilities:
This ain’t Monopoly money
Despite trading near 52-week-highs, I’m convinced toy maker Hasbro Inc.(NASDAQ:HAS) has what it takes to keep shareholders happy for decades.
In addition to being the name behind such perennial hit games as Magic: The Gathering, Twister, Monopoly, and Battleship, Hasbro is also poised to benefit by creating merchandise for every blockbuster movie from entertainment giant The Walt Disney Company (NYSE:DIS), so you can bet it was happy when Disney announced plans for multiple new Star Wars movies following its acquisition of Lucasfilm late last year.
In the meantime, Hasbro Inc.(NASDAQ:HAS) can look forward to renewed sales from next year’s new installment of the Transformers movie franchise, and long-term investors can rest easy collecting a solid 3.7% dividend.
Clean profits from a dirty business
If you’re looking for another durable long-term business, look no further than garbage disposal and recycling expert Waste Management .
As the owner of 283 active landfills, 17 waste-to-energy plants, 131 recycling plants, 95 landfill gas projects, and six independent power production plants, Waste Management (NYSE:WM) is North America’s largest recycling and waste services provider and boasts an enviable moat, which many investors believe is second only to The Coca-Cola Company (NYSE:KO).
While the stock doesn’t look particularly cheap at nearly 22 times trailing earnings, its 3.8% dividend should help in the long run.
Last but not least, thanks to the initiation of its inaugural dividend late last year, I’m happy I can now include in the list of my favorite dividend stocks. After all, the graphics chip specialist currently trades for less than 14 times trailing earnings and had a jaw-dropping $3.73 billion in cash on its balance sheet at the end of its most recent quarter. This, for those of you keeping track, represents nearly half NVIDIA Corporation (NASDAQ:NVDA)’s entire market capitalization.
NVIDIA has been incredibly busy lately, building a moat of its own as it strives to become a one-stop shop for all things graphics processing. In addition, its recently announced Tegra 4i is poised to give competing mobile chips from the likes of QUALCOMM, Inc. (NASDAQ:QCOM) a run for their money. If NVIDIA Corporation (NASDAQ:NVDA) can steal any meaningful market share from Qualcomm in the mobile segment alone, it’s a safe bet that patient, long-term investors will be richly rewarded as both the share price and dividend continue to increase.
The article 3 Solid Dividend Stocks for the Long Haul originally appeared on Fool.com.
Fool contributor Steve Symington owns shares of NVIDIA. The Motley Fool recommends Coca-Cola, Hasbro, NVIDIA, Walt Disney, and Waste Management. It owns shares of Hasbro, Qualcomm, Walt Disney, and Waste Management.
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